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The Honolulu Advertiser
Posted on: Thursday, March 25, 2010

Declining resort home sales seem to be bottoming out

by Andrew Gomes
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Sales of new Hualalai Resort homes — such as this four-bedroom house overlooking a golf course — boomed last year.

Hualalai Resort

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Hawaii news photo - The Honolulu Advertiser

The Hualalai home, the same as pictured above, included a pool. The Big Island resort also got the year’s best price — $26 million for a five-bedroom.

Hualalai Resort

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Sales of homes at Hawai'i resorts fell for a fourth consecutive year in 2009, but the decline was small and suggests the market may have hit bottom.

A report by local real estate market researcher Ricky Cassiday says statewide sales of residential property at master-planned resorts, such as Wailea and Ko Olina, declined 2 percent to 1,057 last year from 1,082 the year before.

The number of sales, which include new and previously owned condominiums, single-family homes and house lots, began dropping in 2006 with an 8 percent decline, followed by a 16 percent drop in 2007 and then a 37 percent plunge in 2008.

"The slowdown that started in 2006 and accelerated every year thereafter appears to be bottoming out," Cassiday said in the report.

Sales at the low end of the market price-wise were responsible for the shoring up of sales, according to Cassiday's data.

Buyers of property that sold for $250,000 to $499,000 returned to the market in force, making 217 purchases last year. That was the highest volume for this price range since 2005, and was double the 109 sales in 2008.

Property priced from $500,000 to $749,000 also had more sales — 252 last year, up from 195 the year before.

Higher-end properties had fewer sales. The biggest drop was a 48 percent decrease to 73 sales last year from 140 the year before of properties that sold for $2 million to $3 million, according to the report.

Largely because of the rise in low-end sales, the average price for all resort home properties fell last year to $1.2 million from $1.6 million a year before. It was the first decrease since sales and prices were destabilized by the Sept. 11, 2001, terror attacks.

The highest-priced resort home property sold was an 8,630-square-foot house with five bedrooms and 5 1/4 bathrooms on a one-acre oceanfront parcel at Hualalai Resort that was built in 2001 and bought for $26 million.

Hualalai said the sale was among more than $150 million in residential property — including new and previously owned homes — sold at the Big Island resort last year.

Hualalai officials said $40 million of upgrades completed at the resort last year contributed to elevated residential real estate sale activity, which included $43 million in sales in August — the most real estate ever sold in any month during Hualalai's 13-year history.

"Sales at Hualalai Resort in 2009 have surpassed our highest expectations, in spite of the worst recession in recent history," Hualalai Resort CEO Patrick Fitzgerald said in a statement.

At the other end of the spectrum was the Kukui'ula luxury resort community that plans 1,200 homes on Kaua'i. The project led by local developer Alexander & Baldwin Inc. suspended marketing of home lots and had no sales last year. In 2008, 13 lots were sold at Kukui'ula.

A&B plans to finish construction of a golf course, clubhouse and other amenities at Kukui'ula and resume home lot marketing efforts later this year.

By island, the most resort home property sales were on Maui, which accounted for 414 sales last year, compared with 363 the year before. On the Big Island, there were 253 sales last year, down from 284 a year before. On Kaua'i, there were 226 sales, down from 251. On O'ahu, there were 170 sales, down from 196.

The average price was highest on the Big Island at $1.7 million, followed by $1.5 million on Maui, $785,000 on Kaua'i and $726,000 on O'ahu.

Statewide, most sales were condos, which represented nearly 800 of the 1,057 sales. Single-family homes accounted for almost 200 sales. There were 80 house lot sales.